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Wednesday, 18 August 1993
Page: 204

Senator TIERNEY —I direct my question to the Leader of the Government in the Senate and minister representing the Prime Minister. I ask the minister to explain why his government has placed a devastating 50 per cent sales tax hike on the wine industry, one of Australia's most rapidly growing export industries, when that industry needs a buoyant domestic market as a base from which to develop an overseas market?

Senator GARETH EVANS —It is important to appreciate what we have not done with the wine industry, which is what the wine industry most feared and about which there was most pre-budget speculation, and that is impose a whopping great increase in excise. That did not occur. The truth of the matter is that the impost represented by the increase in the wholesale sales tax will not, in our judgment, make a major dent, in any significant way, in an industry that is booming, that is doing brilliantly well in terms of export markets, and that we fully expect not only to survive but also to flourish locally.

Senator TIERNEY —Mr President, I ask a supplementary question. The minister obviously has not been talking to the wine growers I have spoken to in the last 24 hours. Can the minister reconcile the statement by the Treasurer that the primary objective of the budget is jobs with the fact that the Wine Makers Federation of Australia has halved its expectations of wine exports by the year 2000 by $500 million? How can an industry that has been, according to the chief executive of Orlando Wyndham Wines, Mr Perry Gunner, `chopped off at the knees' employ more people when the government increases the tax on wine by 50 per cent?

Senator GARETH EVANS —For a start, I do not know what the expectations were that have been diminished in that way. Every projection I have seen about the future of the Australian wine industry demonstrates an exponential growth path into Europe which is fully expected to be sustained, particularly in our own region, as consumer tastes and preferences are dramatically changing and as we expect to get a piece of that action. As we make another effort to come back into the Japanese market in particular, there is nowhere to go but up in that respect.

  The second point is that the wholesale sales tax increase we are talking about from 20 to 30 per cent is applicable only to domestic wine sales and has nothing to do with exports. Moreover, in relation to its effect on the domestic industry, the nature of the projections I have seen suggest that there will be no difference whatsoever in terms of the consumption patterns and no impact at all, as a result, on jobs in this industry.